The US Dollar (USD) recovered in New York after earlier losses in Europe, supported by safe-haven flows amid broad risk-off conditions, ING’s FX analyst Francesco Pesole notes.
Dollar expensive vs. G10 short-term rates
“The dollar came under pressure yesterday during European hours but recovered during New York’s session, potentially thanks to some safe haven flows abandoning high-beta currencies. Admittedly, the current market environment – bonds and risky assets both falling – isn’t giving clear-cut indications for FX. Some risk stabilization is likely needed to bring the dollar lower, which remains our call for this week.”
“The dollar remains expensive relative to its short-term rate differentials across most of the G10. Yesterday’s ISM manufacturing didn’t move pricing for a December cut as expected: prices paid were a bit higher than expected, but the headline index print was soft. We expect that the remainder of the week will validate the market’s dovish pricing for next week’s Fed meeting.”
Source: https://www.fxstreet.com/news/usd-bounces-amid-risk-off-flows-ing-202512020854
